The savings market will be looked at by the Financial Conduct Authority (FCA) once again, as customers continue to receive poor returns on their cash.
The financial regulator issued a warning to providers in January 2015, after finding that the most loyal customers usually received the lowest interest rates.
At the time, it asked banks to give customers clearer information about interest rates and to make it easier for customers to switch between accounts. This included ensuring that most Cash Isa transfers were completed within seven days.
However, three years on, and the regulator says these steps have not resulted in better rates for customers and it is now examining the industry once again.
In the minutes of its January board meeting, published today, the regulator said it would publish papers on the savings market in due course before launching a consultation.
The regulator says: ‘The 2015 cash savings market study identified some harms for which a number of remedies aimed at improving how customers can open, manage and switch their accounts, had been implemented.
‘These harms were not fully addressed by the remedies implemented, additional remedies are therefore being proposed to address the outstanding harm. The board noted that the proposals follow the testing of remedies to improve switching which did not succeed.’
Sarah Coles, personal finance analyst at Hargreaves Lansdown, comments: ‘When people are working so hard to put money aside for the future, it’s only right that the money they are putting away is working just as hard for them.
‘Clearly, as the FCA has found, this isn’t always the case at the moment. And while it’s good news that it is trying to improve things, the fact that it is planning more consultations and proposals means there won’t be a solution overnight.’
This article was originally written by our sister publication Moneywise.
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